This is a portion of an e-mail I just wrote to someone.......I thought some of the info would be interesting to all:
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BTW I spoke to Tyler Thatcher today Iomega IR (he's really a cool guy , I
think) and had a lengthy conversation about a variety of issues,
unfortunately a forgot to take notes....I really couldn't I was driving when
I spoke to him.......the issues which I can recall are as follows:
1. Internal clik drive will sell to oems under $100 dollars....if I remember
correctly he said "significantly below $100", I seemed to have come away
from the conversation with a geusstimate of $70-$85 for oem
internals.......IMHO this is big. Most people I know, including myself,
thought that since the externals were at $200 the internals would be between
100 and 150......So now lets do some math and lets be
conservative..........lets say the average digi cam costs $400.If iom sells
the drive for 80 to the oem he can add 20 and still advertise at $499. Now
lets take a look at the cost of Flash media......well according to Sandisks
web site: sandisk.com, 40 MB of memory costs
$190........while 40 MB cost $10 from clik..........so, therefore,
ergo............currently to get 40 Megs of storage you need to spend $400
for a digi cam and $190 in Flash memory = total of $590. With clik, The
digicam is $500 and the 40 megs are $10 = total $510 and with retailers that
equals $499.95.....that a nice thought isn't it. Now the best part....after
you've taken and stored you pictures on clik! disks, if you the right
connector (I'm not tech savvy) you don't need a external clik with its
"docking Bay" to transfer the images to your computer ...you PC will read is
right off the clik! disks..............also a good thing IMHO.
2. Virtually all the Buzz Boxes sold this quarter were already expensed out
as inventory in previous quarters...........any $$$ they get is pure profit
at least as it relates to Q4.........company does however have plans to add
some marketing punch behind the line. The are decent margins on the Buzz
Boxes.....but more than that the drive Jazz disk sales.
3 The SB coverage was worked on for a long time......SB's est for Q4 is 6
cents which leads me to believe we'll see 8 cents or better this
quarter....don't forget we have tax loss carry forwards.......IOM will not
pay tax again at least until Q3 99.
4 Beyond PC is getting big commitment ...........BTW I don't know if you've
seen this Website, www.z64.com , its a Nintendo related product....Tyler
didn't even know about it yet..............on a serious note.....inner
management seems to be more tight lipped than Hype mongering, this is good
IMHO.
5 Huge Asian demand for external clik!s
6 No improvement with licensees..........of course, maybe IOM becomes so
efficient that they don't need to rely that heavily on the licensee:)
7 Almost had another large brokerage house initiating coverage, but the
analyst quit to run a hedge fund.......I don't expect more coverage until
after Q4 or maybe even Q1 99.
8 Record/Play-Download/Read?: They are talking to a lot of different
companies about expanding the use of Zip and Zip disks i.e.. Amazon.com re:
books.........no other specifics mention but indicated that the company is
talking to more than a few company in the music recording business.
9 Mr. Glore's compensation package is directly links to share holder
value......ie he the gave him a shit load of option and will give him more
if he can get the job done...................also good.............also
good............
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